Business Loans

How to Track Expenses for PPP Loan Forgiveness

May 25, 2020 • 3 min read
Business Owner Managing Bills
Table of Contents

      UPDATE: The PPP loan application period ended May 31, 2021. Learn about financing options available for small businesses today at

      If you applied for and received a Paycheck Protection Program (PPP) loan, you’re likely very aware of the uses, expectations, and tracking requirements needed to achieve loan forgiveness. If you’re not, we’ll give you a refresher here, along with another basic guide for how best to track the movement of every single one of your PPP dollars. 

      Where You Can Spend Your PPP Loan Dollars

      The Paycheck Protection Program (PPP) loan forgiveness specifications are pretty strict when it comes to funds usage. There are 2 core categories of which you need to be aware: “payroll” and “other business expenses.” To get the forgiveness we all hope you will, it’s vital that you keep to these approved uses and within the amounts stipulated by the SBA (more on that in a bit).


      Contrary to what some people might expect, “payroll” doesn’t just include the paychecks passed out to employees. When it comes to the PPP loan category, quite a few other business costs also fall under the payroll umbrella. In addition to employee compensation, these include:

      • Paid vacation, maternity/paternity, family, medical, and sick leave
      • Allowances for dismissal or separation
      • State or local taxes assessed on employee compensation
      • Healthcare benefits (including premiums for insurance)
      • Retirement benefits

      Other Business Expenses

      This category may seem like the catch-all bag, but it’s not. The forgiveness requirements are quite specific on the qualifications and general parameters surrounding the term “other.” Fortunately, we’ve got the list right here:

      • Rent and utilities (for business locations) 
      • Interest on mortgage obligations (excluding prepayment or payment of principal on a mortgage)
      • Interest on any other debt obligations that were incurred before February 15, 2020

      Details You Don’t Want to Miss

      Not only do you have to worry about how you use your PPP loan funds, but you also need to take special care of how much you use between those 2 categories. According to the forgiveness details section of SBA’s Paycheck Protection Program page, you must use no less than 75% of the loan amount to cover the payroll costs listed above. Additionally, they state that forgiveness is based on whether or not you maintain or quickly rehire employees at their original salary, but “forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”

      All of that means you desperately need to stay on top of your books, track your spending, and have a paper trail for every penny received and spent. Fortunately, we’ve got a pretty great tool that can take your bookkeeping to the next level.

      About the author
      Bjolan Holyoak

      Bjolan Holyoak is a small business finance writer based in Utah. As a copywriter for Lendio, he fuels the American Dream by giving small business owners the information they crave. He believes that with the right panache, financial information can be as much of a "breath of fresh air" as a hike in the Utah mountains.

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